LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Taking everything into account, LAD scores 5 out of 10 in our fundamental rating. LAD was compared to 121 industry peers in the Specialty Retail industry. There are concerns on the financial health of LAD while its profitability can be described as average. LAD is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
LAD had positive earnings in the past year.
LAD had a positive operating cash flow in the past year.
Each year in the past 5 years LAD has been profitable.
In multiple years LAD reported negative operating cash flow during the last 5 years.
1.2 Ratios
LAD has a better Return On Assets (3.62%) than 61.16% of its industry peers.
With a decent Return On Equity value of 12.56%, LAD is doing good in the industry, outperforming 68.59% of the companies in the same industry.
LAD has a Return On Invested Capital (5.71%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for LAD is significantly below the industry average of 12.74%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROIC | 5.71% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
LAD has a better Profit Margin (2.31%) than 60.33% of its industry peers.
In the last couple of years the Profit Margin of LAD has remained more or less at the same level.
The Operating Margin of LAD (4.49%) is better than 63.64% of its industry peers.
In the last couple of years the Operating Margin of LAD has grown nicely.
LAD's Gross Margin of 15.39% is on the low side compared to the rest of the industry. LAD is outperformed by 87.60% of its industry peers.
LAD's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LAD is destroying value.
Compared to 1 year ago, LAD has less shares outstanding
Compared to 5 years ago, LAD has more shares outstanding
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.51 indicates that LAD is not a great score, but indicates only limited risk for bankruptcy at the moment.
LAD's Altman-Z score of 2.51 is in line compared to the rest of the industry. LAD outperforms 56.20% of its industry peers.
The Debt to FCF ratio of LAD is 116.40, which is on the high side as it means it would take LAD, 116.40 years of fcf income to pay off all of its debts.
LAD has a Debt to FCF ratio (116.40) which is in line with its industry peers.
A Debt/Equity ratio of 1.95 is on the high side and indicates that LAD has dependencies on debt financing.
LAD's Debt to Equity ratio of 1.95 is on the low side compared to the rest of the industry. LAD is outperformed by 70.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Altman-Z | 2.51 |
ROIC/WACC0.63
WACC9.08%
2.3 Liquidity
LAD has a Current Ratio of 1.18. This is a normal value and indicates that LAD is financially healthy and should not expect problems in meeting its short term obligations.
LAD has a Current ratio of 1.18. This is in the lower half of the industry: LAD underperforms 64.46% of its industry peers.
A Quick Ratio of 0.31 indicates that LAD may have some problems paying its short term obligations.
With a Quick ratio value of 0.31, LAD is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
LAD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.64%.
The Earnings Per Share has been growing by 20.64% on average over the past years. This is a very strong growth
Looking at the last year, LAD shows a quite strong growth in Revenue. The Revenue has grown by 12.81% in the last year.
Measured over the past years, LAD shows a very strong growth in Revenue. The Revenue has been growing by 23.35% on average per year.
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
3.2 Future
The Earnings Per Share is expected to grow by 16.37% on average over the next years. This is quite good.
Based on estimates for the next years, LAD will show a small growth in Revenue. The Revenue will grow by 6.67% on average per year.
EPS Next Y11.56%
EPS Next 2Y11.82%
EPS Next 3Y13.31%
EPS Next 5Y16.37%
Revenue Next Year5.14%
Revenue Next 2Y5.56%
Revenue Next 3Y6.85%
Revenue Next 5Y6.67%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 9.88, the valuation of LAD can be described as reasonable.
84.30% of the companies in the same industry are more expensive than LAD, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.82. LAD is valued rather cheaply when compared to this.
LAD is valuated reasonably with a Price/Forward Earnings ratio of 8.31.
Based on the Price/Forward Earnings ratio, LAD is valued cheaper than 85.95% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. LAD is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.88 | ||
| Fwd PE | 8.31 |
4.2 Price Multiples
61.16% of the companies in the same industry are more expensive than LAD, based on the Enterprise Value to EBITDA ratio.
LAD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 70.93 | ||
| EV/EBITDA | 8.34 |
4.3 Compensation for Growth
LAD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LAD's earnings are expected to grow with 13.31% in the coming years.
PEG (NY)0.85
PEG (5Y)0.48
EPS Next 2Y11.82%
EPS Next 3Y13.31%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.72%, which is pretty low.
LAD's Dividend Yield is a higher than the industry average which is at 5.28.
With a Dividend Yield of 0.72, LAD pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of LAD is nicely growing with an annual growth rate of 11.85%!
LAD has paid a dividend for at least 10 years, which is a reliable track record.
LAD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
6.67% of the earnings are spent on dividend by LAD. This is a low number and sustainable payout ratio.
LAD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP6.67%
EPS Next 2Y11.82%
EPS Next 3Y13.31%
311.45
+3.87 (+1.26%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners104.39%
Inst Owner Change10.67%
Ins Owners0.93%
Ins Owner Change-2.35%
Market Cap8.11B
Analysts84
Price Target395.4 (26.95%)
Short Float %5.9%
Short Ratio3.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.67%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.5%
Min EPS beat(2)-1.6%
Max EPS beat(2)6.59%
EPS beat(4)3
Avg EPS beat(4)5.72%
Min EPS beat(4)-1.6%
Max EPS beat(4)10.88%
EPS beat(8)4
Avg EPS beat(8)0.76%
EPS beat(12)4
Avg EPS beat(12)-1.45%
EPS beat(16)8
Avg EPS beat(16)6.82%
Revenue beat(2)1
Avg Revenue beat(2)-1%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)0.33%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)2
Avg Revenue beat(8)-1.55%
Revenue beat(12)2
Avg Revenue beat(12)-1.99%
Revenue beat(16)6
Avg Revenue beat(16)0.34%
PT rev (1m)-7.02%
PT rev (3m)-9.28%
EPS NQ rev (1m)-4.88%
EPS NQ rev (3m)-3.49%
EPS NY rev (1m)-6.5%
EPS NY rev (3m)-4.73%
Revenue NQ rev (1m)-0.9%
Revenue NQ rev (3m)-0.75%
Revenue NY rev (1m)-1.96%
Revenue NY rev (3m)-2.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.88 | ||
| Fwd PE | 8.31 | ||
| P/S | 0.22 | ||
| P/FCF | 70.93 | ||
| P/OCF | 17.83 | ||
| P/B | 1.2 | ||
| P/tB | 5.01 | ||
| EV/EBITDA | 8.34 |
EPS(TTM)31.53
EY10.12%
EPS(NY)37.49
Fwd EY12.04%
FCF(TTM)4.39
FCFY1.41%
OCF(TTM)17.47
OCFY5.61%
SpS1413.93
BVpS259.62
TBVpS62.17
PEG (NY)0.85
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROCE | 9.81% | ||
| ROIC | 5.71% | ||
| ROICexc | 5.78% | ||
| ROICexgc | 7.59% | ||
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% | ||
| FCFM | 0.31% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexcg growth 3Y-22.88%
ROICexcg growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score5
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Debt/EBITDA | 6.75 | ||
| Cap/Depr | 114.61% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 23.32% | ||
| Profit Quality | 13.46% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 2.51 |
F-Score5
WACC9.08%
ROIC/WACC0.63
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
EPS Next Y11.56%
EPS Next 2Y11.82%
EPS Next 3Y13.31%
EPS Next 5Y16.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
Revenue Next Year5.14%
Revenue Next 2Y5.56%
Revenue Next 3Y6.85%
Revenue Next 5Y6.67%
EBIT growth 1Y-2.36%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.38%
EBIT Next 3Y14.11%
EBIT Next 5Y12.13%
FCF growth 1Y111.82%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y166.36%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%